According to the former International Monetary Fund and Morgan Stanley economist, the majority of analysts are missing the trend because they evaluate the nominal value of central banks’ dollar holdings on the basis of data released by the IMF.
“However, if we take into account changes in the value of the dollar, then, according to our calculations, we’ll see that the dollar share in foreign reserves has lost about 11% since 2016,” Jen told Die Welt on Thursday.
He argued that Washington’s decision to freeze Russia’s dollar reserves after the launch of Moscow’s military operation in Ukraine had been the decisive event.
“This has fueled fear and anxiety in Beijing, but also in other emerging countries,” he said, adding that holding reserves in US dollars had been always considered absolutely safe until the drastic move.
Jen explained that the BRICS countries had been increasingly focused on alternatives to the greenback, RT reported.